The Solyndra Shutdown – Who Knew?

On the last day of August 2011, high-tech photovoltaics manufacturer Solyndra abruptly shut down. The cutting-edge solar power technology company announced it would file for Chapter 11 bankruptcy protection. Employees were turned away when they arrived for work that morning; in total, 1,100 full and part-time personnel were laid off overnight.

Based in California, Solyndra was touted as an example of cutting edge American solar technology design, and was actually manufacturing their products in the United States rather than offshore. The deck seemed stacked in their favor early on – in 2009, Solyndra received a $535 million federal loan guarantee from the Department of Energy. President Obama visited Solyndra in May 2010 and cited it as an example of the type of green-energy firm his administration was trying to cultivate. The company claimed strong growth and substantial sales in the first half of 2011.

Media reports such as this KQED News Fix suggest various generalized causes for the shutdown, including perceived failure of government attempts to stimulate “green” and “high-tech” business development.

The official Solyndra statement primarily blames external economic and regulatory factors. There are no doubt a few kernels of truth in some of these allegations. And, there is a key factor in success for any business or organization that is not even touched on in these or other media reports.

Various news articles and in particular this video make it very clear that Solyndra employees had no idea their company was going to suddenly cease operations. The plant was extremely busy; some employees had even been called in for extra work recently. “The company didn’t say anything,” says the man in the video above, and later, “…I don’t know what happened.” When asked what his reaction to the sudden layoff was, he says “..nothing I can do.”

So, who knew? And when did they know it?

Certainly the top executives knew about the shutdown before it happened. The vast majority of employees clearly did not. Without inside information, we can’t know how far down the chain of management advance notice was given.

And, without details from within Solyndra, we can’t know who did – or didn’t – see the writing on the wall, have some awareness that the business was in trouble, know that appropriate action needed to be taken. Did anyone notice? Try and raise an alarm? Was the failure a result of lack of information, of poor business decisions, of both?

What seems clear is that 1,100 people at Solyndra were in the dark about whatever the top executives did know. And if any among those 1,100 knew something useful themselves, there was no way to get that information to those calling the shots.

Whether or not the company could have been saved is speculation. What is fact is that they did not have in place proven organizational systems to maximize their chances of success.

Everyone in an organization has information potentially beneficial to that organization. When that information can flow freely throughout the organization, it is available at any level where it is needed. A company such as Solyndra, with few or no informational links between employees and management, is not merely ignoring but actively blocking one of its most valuable decision-making resources.

Dynamic Governance insures that information relevant to decision-making can flow freely throughout an organization. Each decision-making business unit, working group, or equivalent – a circle in Dynamic Governance terms – is linked to those that are operationally above and below it. That is, between any two circles, there are two representatives – links – one from each circle to the other. The circle members who serve as the links are selected by consent of the represented circle, and part of their job is to insure the flow of information between their circles.

We can’t know for sure if this kind of linking and improved flow of information – getting valuable feedback and ideas from all levels and corners of the company – would have saved Solyndra. It certainly would have given them a better chance.